New generations mean new drinking habits. For younger consumers it’s important to make conscious decisions, both regarding what you drink, but also for when, where and with whom you drink it. That means the market for Ready-to-drink (RTD) beverages has exploded. We had a chat with The Absolut Company’s Sofia Heuer, Director Global Consumer Insights & Planning and Fredrik Syrén, Director Global Channel Marketing, Brand Advocacy and RTD’s, on how to pick up the trends and turn them into products.
Sofia, how do you work with consumer insights?
In many ways. Partly specific to The Absolut Company and our portfolio, but we also work with trend and foresight reports for the entire Pernod Ricard group. You could say that it is our job to identify the trends and then connect them and define what they mean for our brands. The method is very much based on understanding different target groups, where we have an ongoing dialogue with them on various subjects. We do, for example, in-depth interviews, ethnographic research, group interviews, social listening, continuous monitoring and ad-hoc coverage.
And which are the biggest consumer trends right now?
The convenience segment has had a significant increase the last years, and there are a couple of underlying trends driving this change. For example, there has been a strong development of what we call daytime drinking the past few years – when you don’t just consume alcohol in the evenings. For example, it could be about festivals, having a picnic outdoors or just hanging out with friends. That’s where ready-to-drink products fits nicely. They are easy to keep at home in the fridge and provides variety of flavors as well as enable discovery of new cocktails, without the fuzz of having to have ingredients and mixers at home. In addition, since they’re low in alcohol, you can easily keep track of how much you drink compared to if you mix the drinks yourself, which is important from a health and wellness perspective. In other words, with ready-to-drink products you are more in control of your alcohol intake. Another reason to why consumers are looking for control is because of social media. Everything you do can now be documented beyond your control.
How do you work to support the development of new products?
We put a lot of effort into understanding consumers needs and what they are attracted to in products and in this way we can get a better idea of which flavors to either pick up or remove. Right now, for example, we are seeing an interest in cross-pollination of flavors across continents, in the same way as the fusion cuisine in cooking. There is a lot of inspiration from street food and peppery flavors. Of course, a lot of inspiration comes from Asia, but also from Mexico and South America.
Fredrik, why does The Absolut Company focus so much on the Ready to drink-segment?
The market has exploded in several parts of the world in the last couple of years. Much of this development stems from a strong US-based trend which can be summarized as “better for me”. You want to enjoy a drink, but not get too many calories. You want something lighter than a beer to feel less full. This has led to the strong growth of the hard seltzers segment. Another trend that has also helped to popularize RTD’s is that it has become much more premium. Now there are high-quality cocktails in a can that taste perfect and that you just drink from the can or pour and serve. We have, for example, launched a range of Absolut cocktails and Kahlúa has its popular Espresso Martini. Malibu has the classic Pina Colada cocktail and some other refreshing offers.
What differences are there between the generations?
In terms of age, one might be inclined to generalize a bit and say that RTD’s mainly appeal to younger target groups. But older target groups are also starting to open up to the convenience of ready-mixed cocktails. One explanation for this may be that younger generations aren’t mainly looking for the effects of alcohol. For example, we see a clear trend that nightclubs are no longer as important as bars when it comes to consumption. The pandemic has also accelerated this shift. Today you hang out more at home and then it is convenient to have a variety pack in the fridge so you can serve perfectly chilled drinks to your guests without having to worry about mixing it right or having all the ingredients available. We also see that this trend continues after the pandemic. The forecast for the top 20 markets is growth of about 20 percent annually.
Is this a global trend, or are there any regional specifics?
The development differs between markets. The US is both the largest market and also have the highest growth with over 40 percent growth last year. The calculations made by independent research bodies are that RTD’s will overtake wine in terms of volume in the American market already this year and be the second largest alcohol segment after beer. Next to the US, Japan is the largest market, but with a much stronger presence of domestic brands. In Europe, we’ve been a bit slow to embrace RTD’s, but as there are more and more premium and “better for me” alternatives, the market is showing a strong momentum now as well.
Responsibility for people requires good judgement of character with a great knowledge and skillset to help key talents within the organization to develop their careers. We had a chat with Kerstin Lindström, VP Human Resources, about the challenges of being the rebel in the group, how to break silos throughout the company and the recipe for success in attracting the world’s best talents to the cold, dark north. And how to find the best nose in the business.
How do you work to ensure that Absolut always is perceived as relevant?
Well, for starters by making sure we’re being perceived as relevant to all our existing employees. Our co-workers are our most important ambassadors and if they thrive, we will attract others to join us. I think it is important to have that self-confidence as an employer. Then it’s of course a necessity for all of us who work with HR to keep up with trends in the work force market and in society to be able to constantly review our offer. It can be about everything from flexible benefits to ensuring a good working environment, offering relevant developing opportunities and, not least, career paths. I think we do all this, and much more, very well today, but going forward we will put even more focus on communicating about The Absolut Company as an employer. We want to reach out with our message what makes us special and why you should join our team; internally to build engagement and retain our people, and externally to attract future talent.
What are the challenges when searching for the right candidates for a global organization?
We have great hiring processes and tools to support quality assurance in the candidate experience. We also have a great advantage in being able to get assistance from the broad HR network that exist within the Pernod Ricard Group. It is easy to become a bit overwhelmed when searching for candidates in certain markets. Take South Korea as an example: here, we depend on the local team to help us find the right candidates. They are the ones keeping track of the smartest channels to use and how to advertise and customize requirements of profiles in that market. The cultural aspects are super important and can’t be overlooked so local knowledge is one of the keys to finding the right talent. When it comes to candidates for leadership team positions, the recruitments are handled centrally as part of the global talent process, coordinated by the HR team at Pernod Ricard head office in Paris and involving all affiliates.
What types of recruitments are you most passionate about?
I like all types of recruitments. It’s so cool to meet other people who are passionate about what they do – just as I’m passionate about what I do. I am very proud of TAC and it is always great to get the opportunity to present what we are good at and what we want to achieve and understand how the company needs fits with what different candidates themselves are good at and how they want to contribute, simply put; to find a happy match!
What does your dream recruitment look like?
One that I was very excited about was when we searched for a new “Billion Dollar Nose”. Our sensory expert retired and needed to be replaced and we were literally looking around the world for suitable candidates, but in the end, we ended up hiring internally. Giving a development opportunity to Daniel Nilsson, an existing talent, in strong competition, and finding what we needed in our own backyard was a very satisfying feeling. Then, of course, I must also mention the recruitment of our Chief Creative Officer Tad Greenough. It was a true dream recruitment and I think it’s amazing that we were able to attract such a strong talent all the way from Oregon to Stockholm. Tad is truly a ‘perfect match’ that makes a difference and contributes to leadership, creativity and relationship building. Tad embraces our culture and values and is a good ambassador.
Which roles are most difficult to recruit?
For TAC, there are two types of recruitments that can be extra tricky: finding specific functional expertise and candidates with international experience. We’ve historically had a strategy to find and recruit good generalists, but since a while back we are building a clearer expert organization. And this transformation is somewhat challenging from time to time. Recruitment where significant international experience is required is also difficult at times. We’re in constant need of new perspectives from other cultures and finding people with the right skillset, who are also used to working in a global context, is hard. At the same time, it is vital for us. Our brands have a global reach and Sweden is a small country, with few companies providing this type of global roles. To find the right talent, with the right experience, we need to challenge ourselves to be flexible and creative and not necessarily demand that the candidates must be in Sweden to work for TAC.
Has the pandemic made you think in a different way in these matters?
Yes partially. In TAC, depending on type of job or course, our people had the opportunity for some remote work even before Covid, but the development during the pandemic has accelerated the change. We’ve now proven to ourselves that more work than we expected can be done virtually with good results. I believe there is a general maturity in Sweden to work remotely, compared to some countries where office tradition is more rooted. The dual responsibility of parenting and our culture of trust might be part of the explanation. With this said we should not forget that we are in the conviviality business, the meeting in real life between people enjoying our products is in our DNA. We love to come together and interact, build on ideas and collaborate.
What questions do you usually have to deal with at work?
My role is to drive the HR topics on a strategic level; have a holistic view and lead the way for my team. I often get involved when someone in my team wants to have feedback on a proposal or ask for a second opinion before deciding. I try to avoid being too stuck in details. Within Pernod Ricard, the business model is largely based on relationships and collaboration, so I often engage when we need to establish contacts or find solutions across functions or affiliates. Since a few years back, the group has built up several global processes within HR, and I appreciate that development. I think it makes us more professional and more efficient as an organization; with higher quality thanks to leveraging expertise and decisions from skilled people looking at the full picture and common needs.
Which issues are the most difficult to deal with?
Change and challenging status quo is always difficult. As humans, we’re programed to avoid change. Security is usually the first choice, so the uncertainty of something new can be scary. But constantly develop staff and involve them in changes is one of the keys to getting people on board and feel they are part of the transformation journey. Our industry is undergoing rapid change and we, as a company, must keep up. This of course means that we sometimes need to bring in new skills and capabilities from outside expertise, but we also value continuity and experience and we believe in constant capability building of our people. The mix is what makes the drink tasty, right. We often choose to refine, rather than renew, we try to build on what we have and often implement changes in small steps instead of radical leaps.
How do you work with building functional teams?
Within Pernod Ricard, we have an HR strategy called TransfoHRm and in that strategy we clearly communicate that we put the employee in the center. We must have mixed teams with a variety of perspectives, and we strive for empowerment, i.e. to strengthen individuals and teams to work independently. This works very well within TAC and in the company culture; we’ve come a long way when it comes to supporting the development of independent employees and giving them freedom under responsibility and accountability. It’s a cornerstone, just like trust.
What is most challenging in your role?
That there are many initiatives knocking on the door and a very ambitious transformation agenda in the group. It’s all great stuff, but it takes a lot of hands-on work for the HR team to adapt and implemented locally and we need to be mindful about people’s time but in our team but also others. This means we need to pace launches and roll outs based on what the organization can grasp, take in and embrace.
How do you handle conflicts?
Communication is always the key, I would say. To get an understanding of the different perspectives and try to work out the knots in the teams. If there is a squeak in the machinery, it is important to quickly bring up the problem on the table and talk about it before a misunderstanding or misalignment leads to a conflict. People managers need to be clear with feedback and dare to be open – another aspect is not to be afraid to reach out and seek help if needed.
How do you work with inclusion?
This is a super important topic for both The Absolut Company and Pernod Ricard. We took a holistic approach at group level on all matters of inclusion a long time ago, but in 2015 the work was intensified when we launched our Better Balance program. It started with a broad, group-wide campaign with an enormous amount of training efforts to increase knowledge, awareness and commitment at all levels of the organization. And our diversity and inclusion program has really paid off – although of course we can get even better. Right now, I think we are in an exciting phase where the Pernod Ricard group has decided to inject new energy in the field and also dare to commit to clear goals on global level, for example when it comes to female representation in group top management. We see, for example, that competitors such as Diageo are very good at highlighting their diversity work and we do not want to be perceived as lesser. To meet the group ambition, we at TAC have a dedicated person in the HR team who is working with inclusion matters and will lead the work of updating our strategy and action plan. At the back of these initiatives, we will also have a strong concept and communication platform that the group has given the creative and audacious name “Live without Labels”.
How do you work to lift employees within the organization?
In managerial training, we talk a lot about celebrating success and giving recognition for good work. It is an important part of the leadership within TAC. We also try to allocate a generous training budget that is used for all employees. But our learning and development strategy is to learn not only from courses and external programs, it is also about learning from others and most importantly you learn on the job. This way, we can broaden and deepen competencies, build capabilities and elevate talent. Another initiative coming up next fiscal year is ‘Pay for Performance’ this is about reinforcing a high performing culture and encourage our people to go the extra mile and differentiate reward based on it.
What experiences have you had with you in the past? And is there any part that you are working on developing?
When growing up, I was naturally drawn to different leadership roles. I did team gymnastics when I was younger and already at the age of 12, I took my first leadership assignment as an assistant coach. Then I remained a coach for 25 years. Sports gave me an incredible joy and desire to constantly strive to achieve my own goals as well as the team’s and help others reach theirs. Then, on the other hand, the flip side of having a strong competitive instinct is that I can get a bit impatient in my eagerness to achieve results. When I was young, I was quick to draw conclusions and find solutions. And sometimes I was in too much of a hurry. Therefore, I have actively worked to learn to listen first, trust the process and adjust my pace. This makes collaboration so much easier, more fun and more effective!
What are you most proud of having accomplished during your time at TAC?
Being a leader at TAC, one of the most important jobs is to safeguard our TAC Values; Together – Audacious – Committed. The teamwork put in when developing these company values and behaviors a few years ago, and how well they describe our culture in a sustainable and long-term way, is something I’m very proud of. They are our common foundation and guide us every day in all types of situations – and I think they are fantastic.
What would you have done if you had not worked at TAC?
Then I would have liked to work in the book publishing industry. I love to read.
The next person to interview in this series is the TAC CFO Donny Tobin. What would you like to ask him?
I think it would be interesting to hear his perspective on what it’s like for him to be part of an executive leadership team for the first time in his career. This is a position that many aspire to, but which relatively few succeed in reaching. What does he think is the biggest difference compared to before now that he is holding one of the company’s top management positions? And of course, it would be interesting to hear about his journey from Ireland, to US and now Sweden; what is sticking out as different and what surprised him about Sweden and TAC?
The story of Absolut Paper and the vision to create a recyclable and fully bio-based paper bottle continues together with PABOCO. We’ve heard rumors of major progress in the project, so who better to talk to than The Absolut Company’s own Future of Packaging Director Louise Werner?
We’re told you have news from the PABOCO community regarding the paper bottle. Would you like to share with us?
Yes, we recently reached a very important milestone. We have managed to integrate the barrier – the coating that separates the fluid from the paper – into the paper itself. With an integrated barrier we can use much less barrier material and start testing different bio-based solutions.
Will the paper bottle still be recyclable? Will it be plastic free?
Yes, it will be recycled as paper. The recycling rate of paper is 70 percent worldwide and separating paper from other materials is nothing new for the recycling industry. That is important, because now when we can integrate the barrier, we are testing different bio-based coatings, including bio-plastics. The important thing here is to use as little barrier material as possible and still ensure good product quality.
What input did you get from the consumers who tested the bottle earlier this year? What satisfies me the most is that virtually everyone asked how they should recycle the bottle. It shows that people care just as much as we do. And although it’s nothing less than what we expect from our consumers, I’m still pleased that they are on board with our vision of having a fully recyclable bottle.
The bottle also has a very special touch and feel to it, with a smooth surface and detailed design elements. People said they appreciated that, and they recognized the high level of innovation that has been put into developing the bottle. They said it was in line with the Absolut brand.
How has the PABOCO partnership helped in the development of the bottle?
We are already two years into development, but we’re still constantly learning from each other. We share insights on everything that can help push development forward, like how new barrier materials performs, how consumers react to the bottle and how well the production lines manage to adapt to an entirely new packaging. Thanks to our diverse needs and expertise, all companies involved in the Paboco Community contribute in different ways to make sure we will have the most durable and sustainable bottle out there.
What’s next for the paper bottle?
With this important milestone achieved, we are eager to test the bottle even further. We test it both in labs to make sure it’s durable over time, and with consumers to make sure it’s appreciated and possible for a large-scale launch. We’re of course also looking forward to exploring bio-based materials that could work as a barrier inside the bottle.
How close are you to achieving the goal of a recyclable and fully bio-based paper bottle?
Integrating the coating into the paper is a huge step forward, and for the first time we are showing a prototype that is very close to our final vision. But we still have some important goals to achieve, like scaling the technology and quality testing of the integrated bio-based material that will replace the plastic film we use today. That is not done overnight though, so we’re still at least one and a half years from seeing it on shelves.
The pandemic has been hard on everyone, but in the Philippines and Mexico, things have been really challenging. We had a talk with Lynne Millar, Purchasing Director at Malibu and Kahlúa operations at Pernod Ricard, on the status of the Malibu initiative the Coconut Commitment and the Kahlúa project; Coffee for Good.
How are the Coconut Commitment and Coffee for Good initiatives doing?
If I start with the Malibu program, life in the Philippines during the pandemic has been especially difficult. In rural areas there is a lack of sanitation and getting access to provide support can be a major challenge as most of the Philippines has been in a lockdown. In the region where most of our coconut farmers are located, the situation has been even worse with the military taking control of the area and setting up checkpoints in efforts to try and control the spread of the virus and to prevent migration of people to different regions. In these areas there is little access to fresh water and no money to buy sanitation equipment and extra food supplies, but within the framework of the develoPPP.de program our partner the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) was able to access additional funds from the Federal Ministry for Economic Cooperation and Development to help aid the community by distributing emergency packs with rice, corn, bottles water and face masks to the farmers. At times, we really didn’t know if our farmers even had enough food to feed their families, so it’s amazing that we could help in some small way.
In addition to the hardest of times facing a global pandemic, the country was struck by a super typhoon in November claiming several lives and affecting over 2 million people, with widespread destruction of homes. As a culture they are so incredibly resilient.
The program was naturally impacted heavily by these circumstances and everyone connected to the project has had to adapt. It was our initial plan to sit down face to face with the farmers to assess a starting point for each individual by defining number of hectares planted, number of family members and typical annual yields and income. This was of course not possible now, so we tried to do what we could from a distance, but it wasn’t easy when we couldn’t talk directly with all farmers. But by reaching 10-20 percent of the farmers, we’re at least able to make qualified assumptions based on the intel we were able to get. We will validate our assumptions when it’s possible.
We also had to cancel all on-site training of the farmers, and instead switch to digital sessions, but eventually we managed to have a consultant visit the area once the hardest restrictions were lifted. The consultant then carried out an assessment of the situation and put together a plan for a set of demo farms that can help train the farmers in sustainable farming methods and how to maximise the efficiency of the farm to both improve the yield and minimize the negative impact on the environment. When time allows, we will build additional demo farms with the involvement of the farming communities, especially the youth. Our ambition is to double the work to make up for time lost during last year. We’re ready with all the infrastructure needed when we’re allowed to restart at site. So, we’ve not wasted any time, but we’ve made less progress than we hoped. Our major targets over the four years of the initiative are to increase the farmer’s yield by 20%, increase income by 15% and also to help the farmers to adapt to more sustainable farming practices, guided by the Farm Sustainability Assessment (FSA) tool developed by the Sustainable Agriculture Initiative (SAI) Platform.
And how has the situation been in Mexico for the Coffee for Good farmers?
It has been a similar difficult situation. The Veracruz region was mainly cut off and access controlled by military adding to that, there was some skepticism amongst the farmers on the severity of the covid virus initially. Our NGO Fondo Para La Paz did their best to educate the farmers and raise their awareness and eventually they understood the serious nature of the situation. Even if Kahlua invests a lot in the program, when Covid 19 impacted the world in 2020 Kahlúa immediately allocated additional funds to ensure that the farmers and the team of our NGO partners Fondo Para La Paz had access to protective clothing and sanitizer products.
In terms of progress for the project, things were slowed down a bit, but the Coffee for Good initiative is so mature by now that there was no immediate need for new planning. This year, we’ve had bigger yields than ever before, so all the planting and work we’ve been doing is proving successful and generating results. Adding to that, both Brazil and Colombia have had bad crops last year which has driven up the prices to a new high. Good news for our farmers as they could take advantage of a short term opportunity to earn more.
Now that the area has opened up a bit more, our NGO can visit the farms again, and some of the construction projects that has been put on hold can continue again. I’m sure we’ll be up to speed quite fast in Mexico soon.
What are the next steps?
For Malibu, we’re really ready to ramp things up. Both by increasing the training of the farmers and the physical help in providing crops for planting. We have a program to replace old coconut trees that are not productive and we’re also looking into varieties that are more resistant to climate change so we can maximize yields over time. That’s our top priority from now on.
For Kahlúa, our plan is to reach the target of 100 percent sustainable coffee by 2022. And we’re well on track to achieving this. Our long-term plan is also to continue to purchase from these communities for many years, even after we’ve completed our Coffee for Good project.
About the programs:
The Coconut Commitment
The Coconut Commitment is Malibu’s way of helping to positively impact the livelihood for 500 coconut farmers in the Philippines by 2024. The goal is to increase their income and farm yields and help them adapt their farming practices.
Coffee for Good
Kahlúa’s initiative Coffee for Good is a sustainable development program designed to have a meaningful environmental and socio-economic impact on the lives of Mexican coffee farmers and their families. Shining a spotlight on how it sources its coffee, Kahlúa has also outlined its ultimate goal – to source 100% of its coffee from sustainable communities by 2022.
As a kid, he wanted to explore space and as an adult he has made it a mission to make the world a better place. Through marketing, inclusivity and meaningful communication, Charl Bassil, Global Vice President Marketing, has set an example on how to use the power of a brand to create positive change. We sat down with the expat South African to learn more about what’s really in the Absolut spirit.
TAC is working hard to foster and retain an innovative and entrepreneurial spirit within the company. How do you work with innovation in your team?
– I genuinely believe we need to create a shared vision of the future. To really get to terms with why and how the future will be better than today. Once you know where you want to go, it’s much easier to plan the journey. And if you are all on board the ride, you can start to find shortcuts or devise a better route as you go. But it all starts with the vision. Coming from South Africa, I have seen the transformation of our own South African society and I take a lot of inspiration from Nelson Mandela and how he constantly worked with getting people to share his vision of inclusivity. Getting a buy-in from the people helped him achieve so much during his five years as a leader for South Africa. Just amazing. If you want to encourage and nourish an innovative culture you need to figure out what the consumer needs, look at and be inspired by what others are doing – as my father used to say, there is no shame in stealing with your eyes – and always try to have a collaborative mindset. The pieces of the puzzle need to fit together to create a full picture, right.
What other innovative companies, brands and entrepreneurs inspire you?
– There are so many great examples, but if I have to name one company that I think has had an incredible journey, I’d say Coca Cola. They’ve successfully managed to move from being a soft drinks manufacturer to a complete beverage company. Another great example is the craft tonic water company Fever Tree, who now make a range of mixers. I think that they’ve really mastered the art of finding and exploiting a niche in the market. There is a saying in our family that when gold gets discovered, don’t just be another miner, but rather be the one who sells the mining equipment. To me, that’s what Fever Tree has understood. And then this answer would not be complete if I didn’t mention Elon Musk. As South Africans, we don’t always have examples of innovators from our own country who are globally renowned. But Elon is one of them and I admire his willingness to try things without the fear of criticism. He has made massive strides to help break the myth that great thinking does not come from smaller places. And even though he can come across as little crazy at times, I think he is great.
What value does Absolut bring to a world where no one drinks vodka?
– Throughout our history, Absolut has focused on three very important things. The first thing is our dedication to inclusivity. We embrace diversity and we are no strangers to welcoming outsiders into our community. When Absolut collaborated with Andy Warhol, the brand became one of the first major brands to truly engage with the LGBT community at scale. This mindset of inclusivity goes back all the way to our founder L.O. Smith, who always worked hard for social inclusivity – especially for worker and women’s rights. And this way of conducting business really attracted me to the brand. As the son of immigrant parents (coming from Lebanon), I can easily relate to the feeling of being an outsider in your community.
You mentioned three key points. What’s number two on your list?
– Absolut has in so many ways been defined by its progressiveness. There’s a constant will and ambition to move forward and to make things better. The Absolut Company has Passion for Progression as our mission statement, and I think it rings true when you think about all the past and present initiatives that have been or are about to be implemented. For example, L.O. Smith reformed the production process to be able to offer good quality vodka at a reasonable price. Another proof point is the fact that Absolut Peppar and Absolut Citron were the very first flavored vodkas ever introduced on the market. Currently our operations teams are doing some fantastic work at our production facility in Åhus to reduce our environmental impact that has been incredibly progressive.
Third and last?
– Absolut has always embraced creativity. Not just in the sense of modern art, but in a much broader way. It is well known that our first major collaboration was with the artist Andy Warhol, so the bar was set very high from the start. But we have also worked with graffiti artists and with street art, and also with entrepreneurs in Silicon Valley and many Gen Z-artists and creatives, who are doing amazing things just using their mobile phones. Creativity is core for how we bring our brand to life and that mindset has fostered a unique openness to trying new things. That’s part of the reason we have the creative platform of “Create better together” built into in all our briefs.
What role can and shall Absolut have as an international brand in a very polarized world today?
– Our purpose, as a brand, is to create a more open world. How we go about this is different in different parts of the world. For instance, in the US we need to break the ice a little bit more than in Europe. That’s why we chose to work with Rain for our #SexResponsibly campaign. At the same time, we have a strong legacy when it comes to manifesting our purpose through our actions. As mentioned previously, we have always advocated for inclusivity and we continue to embrace diversity. In my opinion, it’s all about the mix and how it helps to elevate your purpose – regardless of market, collaboration or campaign.
How did the campaign It’s in our Spirit come about?
– A few years ago, Absolut was suffering from fragmentation in what was communicated and how we communicated our message. At the same time our global CEO was driving for global consistency across our global brands. After reviewing the last 40 years of communication and reflecting on what is relevant for consumers today we have defined “Create better together” as our global creative platform (or big idea) which has since become a beacon for us when developing new campaigns. The “It’s in our spirit” campaign is targeting Gen Z consumers across EMEA Latam and Asia, a generation which in many ways has been described as the loneliest generation ever. They are more connected than any previous generation, but they are feeling isolated from a group. So, we wanted to capture their situation in this campaign and highlight the desire to meet each other, digitally but even more so in real life. To illustrate this, we collaborated with four well-known influencers (across film, music and gaming) to help manifest our need to belong and connect.
How has it been received?
– It worked just as we’d hoped in the UK, Germany and China, so we’re very pleased with the results there. On the other hand, we faced some challenges in South Africa and Brazil, where we will need to refine the communication slightly.
Which is your all-time favorite Absolut campaign?
– For me personally, it’s hard to choose. But the original Absolut perfection campaign by TBWA is beautifully crisp and simple. It has indeed become an iconic piece of advertising. What has made it personally even more relevant for me is the discovery that the creative director behind the campaign was South African, even though he was living in NYC at the time. But knowing that has weirdly given me a bit of confidence that as a South African I do have some legitimacy to be a part of the Absolut story.
What’s most important to you in your job?
– Creating value is really important to me. Let me elaborate. Firstly, I mean adding value to an organization where I work so that it is better off when I leave than before I joined – and that specially applies to the people I have the privilege to work with. Secondly, creating value for our consumers. This can be done in many ways of course, but for me it’s very important that we are able to spread a message that is positive and uplifting to inspire others and to help create a relief from the everyday challenges in the world. And last but not least, I know that creating value for the business is important by contributing to the bottom line.
What has been the most challenging moment in your career? What did you learn
– Like so many people I guess my career has been marked by several challenging moments. But if there is one thing I take away consistently it is that situations will never stay the same (whether they be good or bad) and that a bit of patience and a lot of resilience will allow you to get through any circumstance. As my mother always reminded me when growing up “tomorrow the sun will rise again”.
You were born and raised in South Africa, and now you´re living in Stockholm, Sweden. What are the biggest rewards when pursuing an international career?
– I genuinely believe that you get a chance to challenge your own perceptions … about everything. About who you are, about other people, other cultures and even about where you come from. It gives you a perspective that is invaluable. We have learned to love living in Sweden, because we have found a way to adapt to the culture and a very different climate. It’s efficient and things work well. In some ways, it’s not too different from living in South Africa and in many ways it’s totally different. But it’s a place that we are trying to make feel like home.
Paul Ricard had a motto to “make a friend every day” which is still a guiding principle within the group. What’s your best practice for achieving this?
– Just to be open and curious about other people and to make an effort to reach out to others. This principle fits very nicely with the Absolut brand values of inclusivity. I keep reminding myself that consumers are more than that – they are real human beings. Brothers, sisters, parents … so much more than just numbers on a page. I’m genuinely fascinated by what makes people tick and where they come from, which is a great driver to making new friends.
What would you have done if you had not worked at TAC?
– As a kid, I thought I was going to be an astronaut. My vision was to do a PHD in aeronautical engineering and then go to the US to join NASA. But I’ve always had a desire to make an impact in some way and this was imbedded in me from a young age.
Achieving high set goals require a great ability to translate vision into practice. And when The Absolut Company’s ambitious sustainability goals are to become a reality, two of the keys are to both improve and refine the machines and processes – without this affecting production. The solution is to build a digital copy of the factory in order to be able to test and analyze changes virtually. We had a short chat with automation engineer Emil Svärdh about what he actually does at work every day and why it is so important.
Your title is Senior Automation Engineer. What does that mean?
That is a good question. The simple answer is that I work with our journey to become autonomous – that is, with the digitalisation of our production. I don’t really work with our machines, but more with information flow to and from the machines. Primarily by building a digital replica of our physical flows. In this way, it is easier to see and analyze what is happening in production in order to then be able to make changes and improvements in the real machines. In other words, I sit in front of a computer and set up an architecture of which systems and data points to include, which system should own which data point and how they can be orchestrated internally to business systems or manufacturing systems. It sounds a bit abstract, but when I can show what a change means, it usually clears up. The data we extract shall be used to support our decision making and continuous improvements.
What are the benefits of automation?
Our production philosophy includes that we are One source – that we come from and are manufactured in one place. This allows us to look at the entire flow of production and thus be very agile in finding new ways to refine and improve our processes. Both when it comes to manufacturing and waste management. Making a Litre Absolut Vodka is a simple thing, but if you change something only a little bit in the manufacturing process, it will generate a new digital path that needs to be controlled before the product can be manufactured. And that’s my job.
How far has TAC come in the development of digitalisation?
We are extremely far ahead in an automation perspective. It also means that we have an easier journey than many others. We have got off to a good start thanks to the fact that we have new machines and financial means – but also because we have a management that is interested in us making this journey and an organization that can and wants to be a part of it.
How do you work with AI and Machine Learning when it comes to automation?
AI and Machine Learning is really an upcoming project for us. Today, it is most introduced through predictive maintenance of components in the machines. When it comes to bottling, we are in the starting blocks, but in order for it to be fully implemented, we must first know exactly what we produce and how we produce it from a digital point of view. We are building up that knowledge base right now and when we have all the facts, we can apply AI and machine learning fully. An example of this is how we work with our glass. It is a living material, so that makes it a perfect starting point for applying machine learning in order to be able to avoid sorting out glass that is not incorrect, although the reflection may look like that to the vision system we have. Here, the operator is a key player for us building a reference model of what is a good versus scrap. It takes time to gather all the knowledge, but once it is done, it will definitely impact the production.
What other industries are leading this development?
I would say that the car industry is the one that has come the furthest. Another player is Swedish ball bearing manufacturer SKF. There is a big difference compared to our business though – these industries have an aftermarket that must be taken into account, which is not the case for us. On the other hand, we want to adopt the same basic idea, that is, that we do not just make a product, hence the product itself is a variety of components and operations to be performed. If we think like that, it will be easier to break down our processes and find a digital path to the end product that is flexible. Once we get there, we can also more easily make the changes and improvements needed to reach our goals.
How does your work help TAC to achieve its high sustainability goals?
It is about choosing which initiatives to support. To choose the right one, one must first know what the actual reality looks like and then find the best way to be able to control it. That’s very important. My job is also very much about building on our transparency canvas, that is, how we work and what it generates. The result can then be shown to our customers and also be used for improving our work.
What is your vision for production in Åhus in the long term?
To be a “One button shop”. That we should have a ready-made path for all our products – regardless of whether we want to manufacture one or 100,000 units. We must be even more agile to make changes that take the products we produce to market as fast as possible. It is a journey we are in the middle of and I am completely convinced that when we are at the finish line, it will benefit both us as a company and our consumers.
Safeguarding a 50 billion SEK investment might be considered a heavy workload. But for Lars Ljungholm, VP General Counsel, and his team at The Absolut Company, it’s just another day at the office. It’s his job to make sure things are played by the book on all markets where The Absolut Company is present and to ensure that all the brands and products in the portfolio are kept out of harm’s way. Everyday.
Often, great values can be found in developing and protecting intellectual property rights – such as trademarks. How important is the legal work in this value creation?
– When it comes to protecting our trademarks and other well-known elements – such as the shape of the Absolut bottle – I’d say that our legal work is incredibly important. I remember when I had just gotten this job and met one of the top managers at Pernod-Ricard for the first time, he said ‘Lars, you know that in my opinion you have the second most important job in this company.’ By that he meant that it’s my job to help protect and safeguard their entire 50 billion SEK investment. Another aspect, which is perhaps a little more hands-on, is that we must make sure to protect our brands and our products against trademark infringement and copycats. That is where all our credibility and trust from our consumers lies, so we act on everything we consider to be an infringement of our intellectual property rights. Most of my budget is actually spent on protecting our brands in various ways.
How often do you come across cases where you have to take action against trademark infringement of Absolut?
– Against the portfolio, i.e., all our different brands, we constantly have about 400 infringement and opposition cases globally that we act on. We monitor all the markets we are present in and we keep a close watch on look-a-likes and other intellectual property infringements. Thankfully, those we encounter are to most extent unintentional and there’s often simple and unfortunate mistakes behind the infringement. Usually, they are small players and we try not to ruin their lives. So, a lot of time is spent resolving cases through conversations.
What is your most memorable case?
– When it comes to misleading products, we always act resolutely. This needs to be done several times a year, so I’ve a couple of cases that I can pick and choose from. One odd example involved a producer in New York who had a hard time understanding how in the world we could consider it to be a problem that they launched a product called Kafhua – with the same look and flavor as our product Kahlúa. Despite many attempts on our side to explain the situation and its implications, they really didn’t give up their claim. So, unfortunately, we had to take them all the way to court – which ended up costing them substantially more than if they’d only listened immediately. But they really didn’t want to comprehend the fact that that they couldn’t sell a product that was basically a direct copy.
Marketing today is increasingly being done through collaborations with influencers. How does this affect your legal work?
– It affects us more than you might think. Some 10 years ago, I did not think that my team would sit and scroll through a lot of Instagram accounts during working hours. But now they do! We have to be very careful with how and who we collaborate with and therefore we always go through the history of all proposed influencers to make sure that there is nothing problematic for us in their previous posts. This is super important because we have a number of industry codes that we have committed to follow: i.e., no marketing towards minors, we should always promote responsible drinking and we should show good ethical considerations. And this can be especially problematic when it comes to collaborations with influencers, where a too big part of their followers may be too young. Then we have to decline. We always extract data from Instagram to see what their followers look like. In addition, of course, we also sign agreements where influencers undertake not to publish content that is in violation of the codes we abide to.
Influencer marketing is more cross-border than traditional advertising. How do you legally take into account different rules and regulations in different markets for the same type of content?
– Firstly, we never direct any type of marketing initiatives or advertising towards markets where alcohol advertising is prohibited. Nor if a type of alcohol advertising violates any local rules. I would also say that we have a very good knowledge of the rules that apply in our 30 top markets.
You are also responsible for global brands such as Malibu and Kahlúa. How do you conduct that work from Stockholm?
– I don’t think our work looks any different compared to what we do for Absolut Vodka. Each brand has its own profile and for Absolut Vodka, the Swedish origin is important. But for the legal team, there is no difference. We don’t work exclusively with Swedish law. In fact, the Swedish market only accounts for around one percent of our total sales, so Sweden is not even our main focus. As a company we are Swedish, so certain corporate law, manufacturing regulations and agreements with other Swedish entities are subject to Swedish law, but our global role means that we must have a good understanding of what the legislation looks like around the world. Alcohol is also a very regulated business in many countries, which means that we must be careful about how and where we speak about our products. We have all that competence within my great team here in Stockholm or via our sister companies around the world.
What values do you think Absolut creates?
– I think Absolut stands for very good values when it comes to inclusion. We are pro LGBTQ and we’re against discrimination. We have healthy and good values within the company that are easy to appreciate as a Swede. We are not political, but human values are treasured. I also think that we are at the forefront when it comes to sustainability and I genuinely think that we have a very healthy and good corporate culture.
Pernod Ricard has a very ambitious sustainability agenda. How well can brands and companies communicate with consumers what they’re actually doing? What governs which claims that can be made?
– In market law, there is a strong focus on different types of green claims and sustainability claims. Much of the legislation is about not misleading the consumers. For example, if you take a certain type of data and take it out of context, you can’t really use it. And it is therefore important to always have a 360 degree perspective on any environmental claims in advertising. The important thing is that consumers aren’t being misled into believing that we do more or stand out more than we actually do. So, you sometimes have to ask yourself questions about how much our consumers actually understands from the data points we’ve extract and use to back our claims with? Can they make relevant comparisons? This is complicated and we must be transparent about how things really look like and, above all, avoid exaggerated statements that cannot be fully substantiated.
As head of the legal department, you sometimes have to act as the last gatekeeper for whether an idea can, may or should be realized. What’s your view on this – do you occasionally feel like a party crasher?
– I hate that feeling. Fortunately, it doesn’t happen that often, but when it does, it’s usually because we’ve become involved too late in the process. The work has, so to speak, already derailed. If we instead are invited to take part early in the process, we can act as partner for both the creative and business side. Then it is easier to be solution-oriented and come up with opportunities instead of rising obstacles. But one must also remember that legal is a compliance function. So, don’t kill the messenger. We don’t invent the regulations, but we are aware of them and what restrictions they impose. That’s why you sometimes have to dare to simply say no. If there is a “moose on the table”, it is often our job to call it out.
Abiding to the law feels, perhaps somewhat prejudiced, like a mindset where tradition weighs stronger than the need for change. If so, what is your interpretation of Passion for Progression?
– To me, Passion for Progressions is primarily about supporting the company in developing. I spend a lot of my team’s resources on campaigns and product development. We are constantly trying to stay one step ahead and try to capture regulatory changes and flag for the business when new opportunities arise.
Abiding to the law feels, perhaps somewhat prejudiced, like a Which values are important to you in your leadership?
– Personally, it is very important that I always can be myself in any situation. I don’t wear a leadership suit that I put on for work. I want to be perceived as direct and honest but also accessible and responsive. I am there for my team and for the company 24/7 if needed. For me, leadership is about the word counsel = advisor – in the title legal counsel. The legal function has an incredible overview of almost everything that happens within the company. Therefore, it is sometimes a good idea to take off the legal hat and just be a general advisor and sounding board, also on topics outside our functional expertise.
How has the ongoing pandemic affected your work?
– In a couple of ways. As of now, almost a year into the pandemic, I’ve more or less learned to master all types of digital meetings. At first, I actually didn’t think it’d work as well as it does. But I also think that my efficiency has been affected a lot. There’s, for obvious reasons, fewer 5-minute ad-hoc discussions in the office and more booked 30-minute meetings back-to-back, which means that I usually sit in front of my screen for a good portion of the day. It has also prolonged my working days, meaning I’m putting in more hours now than I did before.
What are you passionate about at work?
– I sometimes compare my job to that of a fire marshal. The main part of our work is about carrying out inspections in order to identify and prevent the risk of fires – probably about 90% of our time is spent on efforts to reduce such risk – but the fire fighter and I probably have the thing in common that we both enjoy our professions the most, when the fire alarm starts, despite all of our precautions, and we need to gather our team and lead the work to put out the fire. That’s when the work is most intense, challenging and competitive. It is not the actual conflict in itself that attracts me, but rather the full focus I experience when I feel that what I’m working on is very important to me, to my team and to the company. I am good at crisis management and I find it stimulating. Of course, I can be happy about corporate profits or getting positive feedback, but winning a legal case is what I really find rewarding.
And outside of work?
– For me, it is to have social interactions. With family and with friends. It can be very unpretentious or super formal. You name it. I just love to hang out with people. At sea, on the golf course or in the ski slopes, or perhaps preferably at the associated spontaneous wine lunches.
Blockchain is more than a goldrush for bitcoin-miners; it’s an efficient tool for tracing your tracks in a secure and reliable way. That’s why it can be so useful for brands that need to keep a close watch on their ingredients’ trail. At The Absolut Company we’ve enrolled Jessi Baker, founder and CEO of Provenance, to learn more. We had a chat with her on the benefits of using blockchain as a means of improving and proving your transparency and traceability.
Firstly, for all the newbies out there: What is blockchain in its most basic parts?
– Most people associate blockchain with bitcoin. And that is one way of utilizing it, but it can be so much more. Blockchain is in many ways how the internet was envisioned at the beginning – a decentralized network – before a few powerful companies such as Google, Apple, Facebook and Amazon made it a lot more centralized. So, I believe, what a blockchain has the potential to do is put the power of the web into hands of the many, rather than at the will of a few. It’s a way of collaborating across the web without centralized control points. Bitcoin is a good example as it is such a contrast to traditional banking. It’s a currency run with a decentralized system that’s user controlled.
Tell me a bit more about Provenance and your vision for the company?
– Blockchain is only a fraction of what we do. We’re a social enterprise that’s mission driven. Our goal is to help brands be more transparent when it comes to the impact of their products. That can be to put stickers highlighting your carbon footprint on the back of the bottles or telling the world about what impact your product has on you, people or planet. You might think that’s kind of a hard sell, but it actually isn’t anymore. We’ve got both governmental regulations and consumer demands on our side, so it’s not a crazy idea anymore. Provenance wants to set a standard by using comprehensive data and a clear methodology that enables easy comparisons through verified sources. We translate data into consumer knowledge and demands on different areas of impact; for example carbon footprints, protection of the oceans or assurance of quality or waste reduction. Transparency needs to be communicated in a consistent, comprehensive and credible way. Provenance helps verify claims and when that’s done, we issue a Proof Point – a kind of badge that says a certain claim made by a brand is proven and verified. We also work with verifiers that are trustworthy and all the links in the blockchain are fully visible.
Are there any potential negative aspects or limitations of this technology?
– Of course. For one, lots of things are still under development. There’s a lack of standards, a lack of UX-designers and business developers – due to the technology having a high threshold for understanding. But the biggest challenge to overcome is that we currently live in a world governed by an oligopoly of information owners.
Can you tell me more about how Provenance and The Absolut Company are teaming up around challenges related to supply chains?
– We’re involved in a pilot project with one of their brands; where we helped them have a look at how they could be more transparent on their impact on the world. There are a lot of pitfalls and we’ve helped them discover the traces they leave behind and how to be as transparent as they possibly can. For them, it’s a way of being more credible and more open. It’s also about showing how they’re making progress.
What kind of outcomes do you foresee?
– I think there is a strong, brand-building case to be made for showing new Proof Points around your supply chain. New information can, for instance, be updated annually to build trust behind the brand claims. In short, it’s a great case of how you can show and share your impact with consumers – who are ultimately the ones making decisions.
It has now been three months since Stéphanie Durroux took over as CEO for The Absolut Company. We had the opportunity to sit down and talk to her about her international background, motivations and experience of the Swedish local food and beverage industry – which she is now such an important part of.
The Absolut Company has the motto Passion for Progression, which sort of acts as a halo for fostering and retaining an innovative company culture. What’s your take on this?
– I think that our Passion for Progression-value rings very true. I was amazed when I realize how important this actually is for everyone working here. Progression is about what we do – developing new products, refining new tastes and conceptualizing new formats. But it is also very much about how we do that. To me, innovation is as much about how you do things as what you do. Take our sustainability work as an example: Our Åhus plant is one of the best in the world when it comes to sustainability. And this is all due to us – as a company – being super innovative and working with the entire value chain to ensure consistency in all aspects of our production and distribution. There is so much effort going into designing processes that minimize the amount of waste produced. And I think that we’ve been able to reach this position because this has been a priority of ours for so many years. To me, this is just another proof of the kind of innovative spirit that’s found within the company. Before I started here, I thought some of the claims were just on the surface, but now I know we have all the hard facts to back our claims.
What’s your background before joining The Absolut Company?
– I started my career in a totally different business, working with marketing for Hachette Publications in France, where I was part of the book division. My dream was always to work with marketing for a company in the cultural sector. Books and movies were, and still are, two of my greatest passions. From there I moved on to Michelin Travel Publications. When I applied for the job there, I thought it was to do marketing for their printed maps, food & travel guides, but it turned out the position was for the digital side of their business. This was back in 1999 and you have to remember that the online business models were quite different then compared to now. We worked really hard to come up with new ways to adapt the content to the digital world, which was a challenge. Google maps didn’t exist, smartphones weren’t actually that smart and people were still relying on printed maps when travelling by car. And I just loved the challenge and the reward it brought when we found new solutions on how to get people to convert. So, I stayed there for five years before moving to China with my family. And that’s when I first joined Pernod Ricard and that I have been a part of ever since.
You’ve had quite a long international career, having – as you mentioned – been posted in China and in Paris previously. And now you’re based here in Stockholm since a few years: what has been the most fun and challenging in your career so far?
You’ve had quite a long international career, having – as you mentioned – been posted in China and in Paris previously. And now you’re based here in Stockholm since a few years: what has been the most fun and challenging in your career so far?
– When I moved to China with my husband, who got a job there, I immediately started to look for a job. I had the chance to get an initial short-term marketing mission at Pernod Ricard in China. This was my first time in the spirits business and just from the start, I was super fascinated by how much of the marketing of alcohol has to do with sociology and culture. Usage and attitudes towards alcohol are very different in China and in France, of course. Food and drinks are such an important part of our respective cultures – not only what you eat and drink, but also the way to do it, and the meaning behind theses traditions. In China, what you buy offers you a possibility to express something about yourself to a much greater extent than in France – at least when it comes to Western spirits. And to get into this mindset and understand this culture was a bit of a challenge for me at the beginning.
What’s most important to you in your job?
– To find a true meaning every day. And by that, I don’t mean a new one every day. But I think that you have to go to work every day knowing what you do and why you do it. We’re here to develop the company and the brands in our portfolio, but the responsibility we put behind this work is almost idealistic. And that’s important to me. Being part of The Absolut Company, as an example, to me also means that I’m part of something that is bigger than just me. And this makes me proud of what I do. Without that, I wouldn’t feel as motivated.
At The Absolut Company, a lot of effort is put into elevating and supporting the Swedish food sector as a whole. What’s your outside perspective on the current status of the Swedish cuisine?
– I honestly have to say that I very much like the Swedish culinary scene. All-together, living in Sweden has so far been nothing but a great experience. And, believe it or not, I actually still haven’t had any really bad food experiences. I’m a bit surprised about the high level of Swedish chefs and food and I’ve had many great food experiences. I’m not an outspoken vegetarian, but I don’t have a big taste for meat. Sweden is a country with fantastic restaurants with amazing vegetarian options. There is being made some true effort to serve decent food that’s meat free.
What has been the most challenging dish you’ve been served here in Sweden? Is it something from our own unique flavor palate, such as fermented herring (surströmming), licorice, caviar or kebabpizza?
– Neither of the above actually. I honestly have to say that I like Swedish “kaviar”, it’s great. I even have some at home. The same goes for licorice. It’s also found in France, mainly in sweets, but I recognize the taste and I like it. I have also started to discover excellent Swedish cheeses. I can’t comment on surströmming. It isn’t something I’ve dared to try yet, but it’s on my list. Perhaps not at the top, though.
Jesper Åström is a digital mastermind and a long-time friend and contributor to The Absolut Company. He was also recently named one of 30 most influential creatives in Sweden. We sat down and had a talk with him on creativity, data driven campaigns and his aspirations on becoming a YouTube sensation.
Congrats on your honorable mention as one of Sweden’s leading creatives by influential magazine Resumé. Why are you on that list?
– Thanks. I think they’ve included me because I say chocking things that makes for great headlines. They contact me regularly for comments and insights and my basic idea is to give them what they want. They know that I know how to use data in a creative way and that I have a long and strong track record of being good at mastering tactical outtakes for brands and products. I’ve been around some 20 odd years by now, you know.
What’s your opinion on the current state of creativity in Sweden?
– I think we’re struggling a bit to find our pace at the moment. It’s a huge gap between generations, where creativity means different things to different people. I recently listened to the biggest Swedish podcast Alex and Sigge, where they were discussing what they believed was the death of culture. Their take was that there are no new important artists with a contemporary impact around anymore. Art is dead. But I disagree. I think it’s very much alive, but you have to look elsewhere than traditionally to find it. Now, artists are creating amazing works on YouTube or in the gaming world, but the thresholds for accessing this kind of art are rather high for people outside of the communities. And it’s a different kind of art, that’s more volatile than a painting or a sculpture, which makes it even harder to understand if you don’t know how to crack the codes.
Where do you find your own creative inspiration?
– I’ve come to realize that my creativity is best utilized when I have a fixed framework to be creative within. If I know the boarders and limitations, I can move more quickly into the solution, and I love to solve problems. I’m fueled by an inner passion to do things differently and to think of ways to tackle a challenge that’s never been done before. And internet is my greatest source of inspiration. But not the standard applications such as Facebook, Google or Instagram. I actively seek out communities where people discuss and share new ways of doing things. Where you can find passionate people dedicated to executing the perfect tactics for a new product launch or a Kickstarter campaign. Once you find these forums and get accepted into them, my world opens up and that frees my own creativity.
What can we expect from you in the future?
– It’s my plan to become a Youtuber. I did a 29-episode tutorial on how to do a successful marketing campaign using data and I got so much energy out of that project that I decided to try my luck professionally. So next year will see the launch of my new project Marknadschefen, which is an online course on learning to master marketing digitally. I’ll still work as a consultant, but this is something I’ve been dreaming about doing for a long time, and now I think that the timing is right for me to see how far it can take me. Sky’s the limit, you know.